AMD on Thursday said it hired Lenovo executive Read as the new CEO after an exhaustive search that started in January. Read previously was the president and chief operating officer at Lenovo where he helped transform the company into the world's third-largest PC maker.

AMD has many challenges that Read will have to immediately address. The company wants to push its successful Fusion PC chips into tablets, a market in which it has virtually no presence. AMD also lost share in the high-margin server processor market to Intel, though it gained overall share in the sagging PC chip market.

Read will spend his first 100 days as CEO learning about the company's markets, exploring growth opportunities and forging relationships, he said on a conference call. AMD has opportunities to push its low-power Fusion chips into new markets and to grow in the cloud and data center infrastructure markets with the company's upcoming Opteron server chips, which will include up to 16 cores, Read said.

AMD began looking for a CEO after former chief Dirk Meyer resigned due to a disagreement with board of directors on the company's future mobile strategy. Read has taken a job many reportedly shied away from, including Pat Gelsinger, formerly Intel's chief technology officer and senior vice president and now EMC's chief operating officer; newly appointed Apple CEO, Tim Cook; and Mark Hurd, a co-president at Oracle who formerly was Hewlett-Packard's CEO.

Analysts expressed relief that AMD finally found a CEO, which helps the company move forward with planning and execution of the chip road map. Read may not be as well-known as other potential candidates, but is a credible executive who will strengthen relationships with PC and device makers.

AMD clearly wants a stronger mobile presence and a key to that is a strong relationship with PC makers, said Dean McCarron, principal analyst with Mercury Research. Despite gaining share, AMD's presence in the mobile market is weak. AMD's x86 microprocessor market share was 19.4 percent during the second quarter this year, compared to a 79.9 percent share for Intel, according to Mercury Research.

Reed will use his past experience at Lenovo to boost AMD's sales of chips for PCs, wrote analysts for FBR Capital Markets in a research note sent on Thursday.

"We do think Read can and will leverage his relationships at Lenovo to help drive AMD's sales, and at IBM to help drive AMD's research and development and foundry strategies," wrote the FBR Capital Markets analysts.

Beyond Intel, AMD faces an emerging threat from ARM, whose chips are making their way from mobile devices to servers and PCs. AMD chips could possibly get squeezed between Intel and ARM, whose processors go into most smartphones and tablets.

The question is whether AMD will remain the firm number two chip maker and gain market share from Intel, or whether it will fall victim to ARM-based chip makers such as Nvidia, which is making ARM-based chips code-named Project Denver for servers, PCs and mobile devices. Just like x86 processors, ARM processors will also support Microsoft's upcoming Windows 8 OS on tablets and PCs.

"These questions, and AMD's response to this challenging situation, will not be resolved or clarified anytime soon," analysts for FBR Capital Markets wrote.

But some analysts said that ARM is more of a threat to Intel and AMD has reasonable strengths to continue incremental growth in the PC market. One question remains whether AMD can create a Fusion chip for tablets that can be a reasonable competitor to offerings from ARM and Intel.

For tablets, Read will have to focus more on software to generate interest in the company's chips, said Jim McGregor, chief technology strategist at In-Stat. AMD has much invested in a partnership with Microsoft, but Windows tablets are not generating much interest.

"AMD needs Android solutions to gain any traction, but there just doesn't seem to be much interest to put Android on AMD-based tablets at this point," McGregor said.

Nevertheless, with the previous experience in the PC industry, Read offers a better chance for AMD to think outside the box than someone from inside the company or another semiconductor firm. Read's first responsibility should be to develop a cohesive vision and then structure the company and its initiatives around it.

"Hopefully, he can accomplish this task in short order," McGregor said.

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